The global petrochemical industry could face multi-billion-dollar legal claims over the damage caused by plastic pollution, according to a new study.
The report, published by the Minderoo Foundation – the philanthropic arm of Australia’s richest man Andrew Forrest – and supported by legal firm Clyde & Co and Praedicat, claims that big petrochemical companies could face massive bills, similar to those that tobacco companies faced in the late 1990s.
It warns that legal action is expected to centre on the US, where corporate liabilities from plastic litigation could exceed $20 billion by the end of the decade.
Dominic Charles, director of finance and transparency at Minderoo Foundation, said this plastic pollution litigation is “really only just starting” and could be “as big as asbestos” or climate change.
“People are starting to understand and get their heads around the visible pollution that they see and the damage it is doing, and the invisible pollution from the chemicals that might be in plastics,” Charles told Forbes.
He added that while the $20 billion liabilities and litigation predicted in the report would not be “cataclysmic” they will be “material”, and investors and issuers will be concerned.
“There are some very specific pollutants, and therefore some very specific parts of the industry that are most exposed,” said Charles.
According to the study, the manufacturers of chemical additives used in plastics, many of which have well-established links to human health, are the most exposed to litigation risk.
In particular, the report says there is “robust scientific consensus” on how additives like certain phthalates, bisphenols and flame retardants are linked with significant health problems, like infertility, type II diabetes and obesity.
And the report adds manufacturers of plastic polymers, whose products degrade over decades and have now entered into the human food chain, are also emerging as a major public health and environmental threats.
It says there is also emerging evidence that microplastics in waste and drinking water can cause harm to humans.
There may also be legal action against plastics companies and their directors for misleading behaviours related to their sustainability claims, which is often described as greenwashing.
The report argues that in the past, petrochemical companies have been protected against legal action because of the complexity of attributing pollution back to its source, but scientific research and legal doctrines are rapidly playing catch up.
It also warns that the plastics industry, insurers and regulators need to work urgently to disclose the scale of exposures and liabilities to date, to prevent further damage.
“We need to understand what we’re dealing with, so that industry and insurers alike can set aside the resources required to deal with the consequences,” said Geoff Summerhayes, former executive board member of the Australian Prudential Regulation Authority.
Looking ahead, Charles said the upcoming international legally binding agreement, which is being drawn up the United Nations, represents a “real opportunity” to tackle the issue of plastic pollution.
“The treaty is a real beacon for hope, but beyond that, my sense is like things will get worse before they get better. The more we can build awareness amongst stakeholders, investors, and insurance regulators, the better. And consumers can help to build that awareness and momentum too.”
In response to the Minderoo Foundation report, the American Chemistry Council’s (ACC) vice president of plastics, Joshua Baca said the report was “designed to generate headlines”.
“We disagree with its characterizations and claims about our industry,” he added.
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